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Full Tilt Poker's license revoked over finances

By Oskar Garcia
Associated Press / September 29, 2011

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LAS VEGAS—Full Tilt Poker, a popular poker website that once offered gambling to thousands of players around the world, had its license revoked by gambling regulators on Thursday who said the site misled officials about its financial operations.

The move by the Alderney Gambling Control Commission on the British Channel Islands put in jeopardy a plan outlined by a lawyer for Full Tilt to repay millions of dollars in player funds that have been in limbo since the site was first shut down to Americans in April amid federal indictments of its executives.

Andre Wilsenach, executive director of the commission, said in a statement on its website that Full Tilt reported balances that had been seized or restrained by U.S. authorities as liquid funds, and also gave unauthorized loans and failed to report material events.

Full Tilt said in an unattributed news release that the revocation makes it more difficult to execute a sale and repay players. The company said it is still committed to repaying players despite "the potential damage done by the commission and its disregard for our players."

A lawyer for Full Tilt based in Washington, Jeff Ifrah, did not immediately return messages seeking comment from The Associated Press.

Ifrah said last week on a popular Web forum for poker players that an investor signed a letter of intent and showed enough funds to take over the beleaguered company and pay back its players. But Ifrah told players on TwoPlusTwo.com that a deal would become "more difficult, if not impossible," if Full Tilt's license were revoked.

U.S. prosecutors accuse the gambling website of operating as "a global Ponzi scheme" by plundering player accounts to pay board members $444 million.

Those payments included funds to well-known poker players, including at least $25 million to 2000 World Series of Poker champion Chris "Jesus" Ferguson and $42 million Howard "The Professor" Lederer.

Ian Imrich, a lawyer for Ferguson, did not immediate return messages seeking comment on Thursday but told the AP last week that the site wasn't running a Ponzi scheme. Imrich said he was looking into whether prosecutors misused the term, conjuring images of Bernie Madoff, a former stockbroker who admitted to the largest Ponzi scheme in history.

"Use of the inflammatory term `Ponzi scheme' in the post-Madoff era is more than careless and may violate pre-trial publicity rules of professional responsibility," Imrich said.

Full Tilt has continuously promised players that their accounts were protected and wouldn't be touched.

But prosecutors said that as of March, the company had $60 million left in its bank accounts to cover the $390 million it owed to players. It routinely mingled player money with its own finances and took cash from some customers to pay out winnings due to others, prosecutors said.

Wilsenach said the revocation doesn't prevent Full Tilt from being reactivated by the commission under new ownership and management. But claims by players were a matter for police and courts, he said.

"Now that (Full Tilt Poker's) licenses have been revoked, (the commission) no longer has jurisdiction over these companies," Wilsenach said.

Executives for Full Tilt were first indicted in April, accused of fraud and laundering money to operate an illegal gambling business in the United States.

Most online gambling is technically illegal in the United States because of a 2006 law that prevents financial companies from processing such transactions. But many people have since called for the law to be clarified to explicitly define the kinds of gambling that is legal and illegal.

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Associated Press writer Raphael G. Satter in London contributed to this report.

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Oskar Garcia can be reached at http://twitter.com/oskargarcia.

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